'Say goodbye to these clean-energy tax incentives imminently': Upcoming expiration of clean energy tax credits
With the end of the year approaching, individuals are encouraged to consider decarbonizing their homes and commute as several federal tax incentives for clean energy are set to expire soon.
The "Big, Beautiful Bill" signed by President Donald Trump has set early expiration dates for federal tax credits for clean and typically cheaper-to-run electric appliances, efficiency upgrades, and solar panels. Among these incentives are the New Clean Vehicle Credit (30D) and the Used Clean Vehicle Credit (25E), which offer significant savings on qualifying EV models and pre-owned EVs, respectively. However, these credits are only available to households earning less than $300,000 for married couples filing jointly, or $150,000 for single filers.
The Residential Clean Energy Credit (25D) offers 30% of the cost of a clean energy installation, with no cap, for solar photovoltaic panels, solar water heaters, home battery storage, geothermal heat pumps, and home wind turbines. This credit expires on Dec. 31, along with the Energy-Efficient Home Improvement Credit (25C), which offers up to $2,000 for a heat-pump heater/air conditioner or heat-pump water heater, and up to $1,200 for insulation and air-sealing materials, windows, exterior doors, and energy audits, totaling $3,200 this year.
Utility bills are expected to rise nationwide due to the new law, making these incentives even more valuable. Additional savings can be achieved by installing heat-pump water heaters and rooftop solar. Households may also be able to access federal home-energy rebates, depending on their state.
Skip Wiltshire-Gordon, director of government affairs for AnnDyl Policy Group, encourages individuals to start talking to contractors to determine suitable upgrades and secure installers' schedules. We are at a 'use it or lose it' point, as the incentives for doing so are set to expire soon.
For those seeking real-world tales, tips, and insights on shifting their homes and lives to clean electric power, the "Electrified Life" column on our website is a valuable resource. The Biden-era program for home-energy rebates was untouched by the new legislation, providing another avenue for households to explore.
The Alternative Fuel Vehicle Refueling Property Credit (30C) is for installing qualified EV charging equipment and is available until June 30, 2026. The Commercial Clean Vehicle Credit (45W) offers up to $7,500 for vehicles that don't meet the stringent requirements needed to claim 30D, but the credit is not directly claimable by consumers. Instead, it gives a fiscal advantage by allowing auto dealers to take the federal tax credit and pass on the savings to leasing customers for vehicles that don't meet the stringent requirements needed to claim 30D.
As we move towards a more sustainable future, taking advantage of these expiring incentives can help individuals reduce their carbon footprint and save on energy costs. It's time to act now to secure these benefits before they disappear.
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